By
AFP
Translated by
Cassidy Stephens
Published
January 3, 2024
French tax authorities have decided not to take legal action against luxury goods giant LVMH over suspected tax evasion, a Bercy source said on Tuesday, confirming a Mediapart report.
In February 2023, the French Court of Cassation overturned a court ruling invalidating a search of LVMH premises carried out by tax authorities in 2019 and ordered the return of the seized documents. He returned the parties to the Paris Court of Appeal.
However, the Directorate General of Public Finances (DGFiP) decided not to pursue the case, according to a Bercy source, thus abandoning its suspicions of tax fraud. “The question was whether another search should be carried out after the Court of Cassation ruling in 2023,” he told AFP.
“It seemed a bit useless” four years later, because “this type of procedure is only interesting if there is a surprise effect” and “there was a risk that we would not find the documents” in question, he added.
The National Directorate of Fiscal Enquêtes (DNEF) carried out a search in September 2019 at several locations of the French luxury giant, including the LVMH headquarters on Avenue Montaigne in Paris, in a case of possible tax evasion.
Tax authorities wanted to investigate the role of a Belgian company, LVMH Finance Belgique SA (LFB), a cash center that has since been repatriated to France. In 2020, the Court of Appeals invalidated the raid and ordered the return of the seized documents, without allowing the DNEF to keep a copy. As the Court of Appeal’s decision was enforceable, the documents were returned to LVMH.
Meanwhile, unrelated to this matter, LVMH signed a “tax collaboration” with the tax authorities in 2022, the objective of which was to establish a dialogue between the parties, “to try to clarify in advance any issues that may seem problematic.” “according to the same source in Bercy.
“This reflects the group’s willingness to be more transparent and to raise any tax issues related to future transactions to us,” the source added, stressing that this type of association, which has already been signed by around 70 groups, does not hinder any taxation. audits.
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